Yuemei XueAssociate Professor
Ocean University of China
China
xueyuemei@ouc.edu.cn
Kee-hung LaiChair Professor of Shipping and Logistics
The Hong Kong Polytechnic University
China
mike.lai@polyu.edu.hk
Energy is not just a vital strategic resource but a time-sensitive one that drives a nation's social and economic development. The energy supply chain, integral to the rhythm of economic growth, must operate smoothly and efficiently for the seamless functioning of all processes, from energy production to delivery to end consumers. A stable energy supply chain is not just a component of national security but a critical one. However, recent geopolitical shifts have disrupted shipping routes and significantly impacted the global energy market. These changes underscore the urgent need to enhance the resilience and security of the energy supply chain, a primary challenge for the global energy industry that cannot be delayed.
While pipelines can facilitate short-distance energy transfers, globalization has made maritime transport the primary method for moving energy across long distances. In 2023, the global oil supply reached 101.9 million barrels per day, with maritime oil trade accounting for 77.5 million barrels, or 76% of the total. This vast network relies on thousands of shipping routes worldwide. However, narrow straits along these routes can restrict vessel size, and any blockage—whether due to geopolitical tensions, natural disasters, technical failures, or other factors—can disrupt these routes. Such disruptions increase transportation time and costs, potentially breaking down energy supply chains. This is particularly impactful for small island developing states and least developed countries, which often rely heavily on imported energy and have limited resources to address disruptions. While the future is uncertain, it is clear that a resilient energy shipping network is essential to mitigate these risks.
What can be done to address these challenges? Are we limited to merely preparing for sudden interruptions and monitoring vessels as they navigate these routes? The solution is complex.
International collaboration is not just important, it is vital for enhancing the resilience of the energy shipping network. Global shipping cooperation is essential because individual nations cannot tackle major challenges alone. Countries must work together to strengthen the anti-cyclical capacity of shipping enterprises through inter-regional cooperation. Anti-cyclical capacity refers to the ability of shipping enterprises to adapt and respond effectively to changes in the global energy market, ensuring the stability and smooth flow of global industrial and energy supply chains. For instance, COSCO Shipping leverages the port of Piraeus in Greece to integrate air routes, ports, and railway resources, creating a China-Europe land-sea express line. This line serves 71 million people across nine countries in Central and Eastern Europe, becoming a key trade corridor between China and Europe, thereby bolstering the resilience of the energy shipping network.
From a micro-network perspective, ports play a crucial role in enhancing the resilience of the energy shipping network. Port infrastructure capacity ensures the network's safe, efficient, and orderly operations. Ports must proactively build and reserve capacity to manage environmental risks, improve surplus capacity, and increase the direct rate of arriving ships. Additionally, ports should allocate a balanced mix of large, medium, and small berths, emphasizing larger berths to better match arriving ship types. This allocation strategy can help reduce congestion and waiting times, enhancing the network's efficiency. Furthermore, strengthening shipping service capabilities and forming clusters of shipping-related services in finance, law, and technology can further improve a port's ability to handle sudden increases in transport demand, ensuring the stability of both domestic and international supply chains.
An intelligent and efficient energy shipping network is the backbone of smooth energy transport. In today's global shipping industry, hundreds of thousands of ships navigate the oceans, exchanging vast amounts of information among over 5,000 ports, 6,000 shipping companies, hundreds of thousands of freight forwarders, and millions of trading enterprises worldwide. Accelerating the digital and intelligent transformation of the shipping industry is crucial. Digital platforms and information-sharing systems enhance collaboration among industry players. By sharing data and best practices—such as real-time information on weather conditions, port availability, and supply chain connectivity—shipping companies can better plan and coordinate responses to disruptions.
While the challenges are daunting, the potential for a resilient energy shipping network is promising and within our reach. By taking consistent, responsible actions with an open and proactive mindset, we can enhance the resilience of the energy shipping network in a world full of uncertainties. This potential for resilience should inspire hope and determination in our collective efforts as we strive toward a more secure and efficient global energy shipping network.
While pipelines can facilitate short-distance energy transfers, globalization has made maritime transport the primary method for moving energy across long distances. In 2023, the global oil supply reached 101.9 million barrels per day, with maritime oil trade accounting for 77.5 million barrels, or 76% of the total. This vast network relies on thousands of shipping routes worldwide. However, narrow straits along these routes can restrict vessel size, and any blockage—whether due to geopolitical tensions, natural disasters, technical failures, or other factors—can disrupt these routes. Such disruptions increase transportation time and costs, potentially breaking down energy supply chains. This is particularly impactful for small island developing states and least developed countries, which often rely heavily on imported energy and have limited resources to address disruptions. While the future is uncertain, it is clear that a resilient energy shipping network is essential to mitigate these risks.
What can be done to address these challenges? Are we limited to merely preparing for sudden interruptions and monitoring vessels as they navigate these routes? The solution is complex.
International collaboration is not just important, it is vital for enhancing the resilience of the energy shipping network. Global shipping cooperation is essential because individual nations cannot tackle major challenges alone. Countries must work together to strengthen the anti-cyclical capacity of shipping enterprises through inter-regional cooperation. Anti-cyclical capacity refers to the ability of shipping enterprises to adapt and respond effectively to changes in the global energy market, ensuring the stability and smooth flow of global industrial and energy supply chains. For instance, COSCO Shipping leverages the port of Piraeus in Greece to integrate air routes, ports, and railway resources, creating a China-Europe land-sea express line. This line serves 71 million people across nine countries in Central and Eastern Europe, becoming a key trade corridor between China and Europe, thereby bolstering the resilience of the energy shipping network.
From a micro-network perspective, ports play a crucial role in enhancing the resilience of the energy shipping network. Port infrastructure capacity ensures the network's safe, efficient, and orderly operations. Ports must proactively build and reserve capacity to manage environmental risks, improve surplus capacity, and increase the direct rate of arriving ships. Additionally, ports should allocate a balanced mix of large, medium, and small berths, emphasizing larger berths to better match arriving ship types. This allocation strategy can help reduce congestion and waiting times, enhancing the network's efficiency. Furthermore, strengthening shipping service capabilities and forming clusters of shipping-related services in finance, law, and technology can further improve a port's ability to handle sudden increases in transport demand, ensuring the stability of both domestic and international supply chains.
An intelligent and efficient energy shipping network is the backbone of smooth energy transport. In today's global shipping industry, hundreds of thousands of ships navigate the oceans, exchanging vast amounts of information among over 5,000 ports, 6,000 shipping companies, hundreds of thousands of freight forwarders, and millions of trading enterprises worldwide. Accelerating the digital and intelligent transformation of the shipping industry is crucial. Digital platforms and information-sharing systems enhance collaboration among industry players. By sharing data and best practices—such as real-time information on weather conditions, port availability, and supply chain connectivity—shipping companies can better plan and coordinate responses to disruptions.
While the challenges are daunting, the potential for a resilient energy shipping network is promising and within our reach. By taking consistent, responsible actions with an open and proactive mindset, we can enhance the resilience of the energy shipping network in a world full of uncertainties. This potential for resilience should inspire hope and determination in our collective efforts as we strive toward a more secure and efficient global energy shipping network.